Health Care and Education Reconciliation Act

As widely anticipated, President Obama signed the Health Care and Education Reconciliation Act (HR 4872) into law earlier this week. The new law makes material changes to the tax law elements of the new health care legislation signed into law last week and also ends—at least for a time—legislative wrangling on health care. Moving forward,…

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‘Green’ Tax Credits

When you invest in energy-efficient products, you may be saving money on both your energy bills and your tax return. The Internal Revenue Service wants you to know about these six energy-related tax credits created or expanded by the American Recovery and Reinvestment Act of 2009. Residential Energy Property Credit This tax credit is for…

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Deducting Charitable Contributions

When preparing to file your federal tax return, don’t forget your contributions to charitable organizations. If you made qualified donations last year, you may be able to take a tax deduction if you itemize on IRS Form 1040, Schedule A. The IRS has put together the following 10 tips to help ensure your contributions pay…

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Husband and Wife Business

One of the advantages of operating your own business is hiring family members. However, the employment tax requirements for family employees may vary from those that apply to other employees. How spouses earn Social Security benefits A spouse is considered an employee if there is an employer/employee type of relationship, i.e., the first spouse substantially…

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Small Business Health Care Tax Credit Summary with examples

The new health reform law gives a tax credit to certain small employers that provide health care coverage to their employees, effective with tax years beginning in 2010. The following questions and answers provide information on the credit as it applies for 2010-2013, including information on transition relief for 2010. An enhanced version of the…

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Check eligibility for tax credits, deductions and payments

Taxpayers can check their eligibility for these credits and deductions on the IRS Web site at IRS.gov/recovery. This special section also contains instructions on how to claim the available tax incentives and provides answers to frequently asked questions. Detailed information is available on the: Homebuyer Credit Making Work Pay Credit Economic Recovery Payments Earned Income…

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Innocent Spouse Relief (And Separation of Liability and Equitable Relief)

Many married taxpayers choose to file a joint tax return because of certain benefits this filing status allows. Both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise as a result of the joint return even if they later divorce. Joint and several liability means…

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Foreign Earned Income Exclusion

Five important facts about the exclusion: The Foreign Earned Income Exclusion United States Citizens and resident aliens who live and work abroad may be able to exclude all or part of their foreign salary or wages from their income when filing their U.S. federal tax return. They may also qualify to exclude compensation for their…

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IRS Audit Red Flags

The IRS has a computer program that targets certain tax returns for closer examination. It’s called Discriminant Inventory Function System (DIF) and it means that some deductions and credits are more likely to attract the government’s attention than others. Some of these may include: Business Use of Your Car Home Office Deductions High Itemized Deductions…

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